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Jayanta Mallick

Kolkata, Aug. 19 The World Bank affiliate International Finance Corporation (IFC) is considering a proposal to extend long-term, Rs 60-crore loan to Kanoria Chemicals and Industries. The IFC board is to formally decide on the proposal on September 10.

Mr R.V. Kanoria, Chairman and Managing Director of the company, confirmed to Business Line that Kanoria Chemicals had sought the loan with a repayment period of 10 years.

The amount will be used to partly finance the Rs 120-crore capital expenditure plan over the next two years, including setting up a greenfield project at Visakhapatnam. IFC holds a 10.84 per cent stake in Kanoria Chemicals.

IFC has termed it as a long-term senior corporate loan.

According to IFC, “the project envisages investments of about $24 million (Rs 120 crore) in next two years”.

It further detailed that the project included a $16-million (Rs 80-crore) formaldehyde and hexamine production facility at Visakhapatnam.

“Another $8 million is divided into various investments aimed at increasing operational efficiencies of the existing plants over the next two years, including $2 million for cleaner production and safety enhancement measures such as increasing the treatment of wastewater by upgrading existing the facility and construction of a new one and improvement of chlorine handling,” the IFC proposal summary said.

According to IFC, the cleaner and safer production measures were being implemented in addition to its requirement to fully phase out the more harmful, mercury-based production (already reduced from 145 to 95 tonnes per day, to only 20 per cent of total production) by 2012.

The company’s plants are in Ankleshwar (Gujarat) and Renukoot (Uttar Pradesh).

At Visakhapatnam, it is installing a 1.05 lakh tonnes per annum formaldehyde plant and a 5,600 tpa hexamine plant by July 2010, according to Mr Kanoria.

IFC said that the capital expenditure plan would move the company further along its bid for optimisation of resources and raw materials use, help to unlock new regional markets for its existing products and increase efficiencies by creating economies of scale.

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